In a market otherwise dominated by global behemoths like Mondelez and Nestle, Indian bean-to-bar chocolate makers are carving a niche of their own. From about a handful of such brands a few years back, the market has grown to a mix of some 20-odd big and small players today, say experts. Thanks to the growing share of local consumers who are prone to travelling and exploring varied products, creating room for new, young firms with distinct propositions to build businesses.
Mansi Reddy, director - brand and partnerships at premium bean-to-bar maker Mason & Co observes: “People are looking for some sort of novelty, new items and flavours every single time. Consumers are evolving and they want to move beyond the regular flavours like a caramel or a fruit and nut when it comes to chocolates.”
The value of the Indian bean-to-bar market is estimated to be about ₹26.6 crore currently at retail value. The segment is expected to grow 60% year-on-year for the next five years to touch ₹200 crore by 2026 on the back of rising consumer demand, according to primary and secondary research conducted by Cocoatrait, which describes itself as the country's first bean-to-bar chocolate concept advocate.
India has about 20 bean-to-bar producers and the count is estimated to go up to 250 producers by 2026. Most companies operating in the space typically sell via a mix of general and offline trade channels and through their own websites as of now. Given that the market is still evolving, most firms are yet to launch exclusive brick-and-mortar outlets.
The pandemic has only given fillip to the bean-to-bar chocolate market, says Devansh Ashar, partner at Pascati which is based in Mumbai. Like consumers in the West, Indians are now reading the contents of a chocolate pack to educate themselves about the kind of products they are consuming. The bean-to-bar chocolates use only organically grown and non refined ingredients sourced directly from the farms. They are processed without the use of any synthetic flavour enhancers, stabilisers, emulsifiers or preservatives, using stone-based refining technology to avoid metal contamination, explains L Nitin Chordia, founder at Cocoatrait.
Also, dark chocolates are by definition vegan as they are devoid of milk powder, points out Ashar. When the brand forayed into the space in 2015 equipped with a small manufacturing facility in Daman, volumes were less than 300 chocolate bars a month or under 20 kilograms. Today, Pascati, which has moved to a bigger manufacturing facility in Maharashtra’s Palghar sells about 5,000 chocolate bars a month and during festivities like Diwali, the company sells up to 9,000 bars. The brand’s chocolate bars are priced between ₹280-315 for serving of 75 grams per pack.
Kochi-based two-year old bean-to-bar chocolate brand Paul And Mike’s bars are priced between ₹250-275. “Our aim was to give the quality of a Latin American chocolate at the price of a Lindt,” says business head Vikas Temani. Temani claims that the business is growing three times every year.
Although the consumption of bean-to-bar chocolates is still largely restricted to the metros and tier-1 markets, the concept is gradually finding takers in smaller cities as well. In fact, it is not the comparatively premium pricing of the chocolates that is keeping consumers of the regions from subscribing to them; rather infrastructure and logistics gaps are posing hindrances to the adequate distribution of the products in tier-2 cities and beyond, say brands.
To be sure, most of the companies largely use only online channels to service small cities as of now. “We do see orders from tier-3 cities but many a times we are forced to cancel them as shipments can take days. Chocolates are heat-sensitive and we do not have established last-mile cold chain infrastructure in the country,” says Temani.
Mason & Co’s Reddy echoes a similar concern. “Online shipments are a challenge due to the nature of the product and poor logistics. The cost of shipping is also high and the minimum order basket should consist of at least three bars for us to accept them,” says Reddy.
But with more delivery and logistics startups setting up shops and building solutions, the problem should get mitigated. “It is just a matter of time,” says Temani.
People in smaller cities are more than willing to experiment. The proliferation of the internet and the consequent reach of social media platforms are making people more informed and are helping in discoverability of new brands and concepts. Bean-to-bar makers say that they get online orders from areas like the North-East, Kashmir. Some of them have managed to rope in offline distributors to sell chocolates in places like Leh and Rishikesh. “We are based in Auroville in Pondicherry which is a small town itself and we see good consumer traction,” says Reddy.
Buoyed by the positive consumer sentiment, brands are firming up expansion plans. Pascati is eyeing the gifting space in a big way and is broadening its choice of gift hampers and baskets. “Our focus will be to grow in the gifting segment where we can offer more products to get the volumes,” says Ashar.
Besides, the company is considering making smaller chocolate packs available in airport counters. At present, Pascati has offline presence in primarily the big metros through a mix of general and modern trade channels. In Mumbai, it is also available via Swiggy and Zomato.
Paul and Mike aims to expand its offline presence (through general and modern trade channels) from 300 stores across 28 cities to about 500 stores in the same locations. “The strategy is to aim for same store sales growth. At some point, we might also consider opening our own exclusive brand outlets,” says Temani.
Also, ramping up online sales through the brand’s own website will be another focus area. Mason & Co sells via a network of more than 100 general and modern retail stores across the country, though limited largely to big cities. The brand also has its own retail shelves within the Bread & Chocolate cafe chains across Chennai and Pondicherry.
